The public discovery of gold in 1874 by the Custer Expedition brought an influx of settlers into the Black Hills region of South Dakota. Rapid City was founded (and originally known as "Hay Camp") in 1876 by a group of disappointed miners, who promoted their new city as the "Gateway to the Black Hills." John Brennan and Samuel Scott, with a small group of men, laid out the site of the present Rapid City, which was named for the spring-fed Rapid Creek that flows through it. A square mile was measured off and the six blocks in the center were designated as a business section. Committees were appointed to bring in prospective merchants and their families to locate in the new settlement. Although it began as a hay camp, the city soon began selling supplies to miners and pioneers, and its location on the edge of the Plains and Hills, with a large river valley made it the natural hub of railroads arriving in the late 1880s from both the south and east. By 1900 Rapid City had survived a boom and bust and was establishing itself as an important regional trade center.

Although the Black Hills became a tourist destination in the late 1890s, it was a combination of local boosterism, the popularity of the automobile, and construction of improved highways that brought tourists to the Black Hills in large numbers after World War I. Gutzon Borglum, already a famous sculptor, began work on Mount Rushmore in 1927, and his son, Lincoln Borglum continued the carving of the presidents' faces in rock following his father's death in 1941, but work was halted and the massive sculpture was declared completed in 1941.